I

The Impact of Knowledge Leakage Management

on Innovative Performance: Field Studying

Commercial Banks in Amman

في دراسة ميدانية :تسرب المعرفة على الأداء الإبداعي إدارة أثر

في عمان التجارية البنوك

Prepared by

Ahlam Youssef Hassan

Supervised by

Prof. Hebah H. O. Nasereddin

Thesis Submitted in Partial Fulfillment of the Requirements for

Master Degree in E-Business.

Business Administration Department

Faculty of Business

Middle East University

June, 2018

II

Authorization

III

Examination Committee's Decision

IV

Acknowledgment

..(شكر وتقدير)

..يْعِجِرْمَ مِلْي العِفِ تْكانَ نْإلى مَ

..يْعِمَوْصَوَ يْبِدَأَ خَوْكُ ةِافَقَثَّللِوَ

..يْعِبَنْمَ مِلُعَالتَّ يْفِى وَلَعْالأَ يَلِثَمَي وَتِيسَدِّقِوَ

ين..الدّرْناصِ نْسَه حَبَة هِورَكتْالدُّ ةِذَاَستْى الأُلَإِ

..نْايَتي بَيقَدِة.. إلى صَرَيْنِها المُتُيَّأَ كِيْلَيرة.. إِدِجَ رِكْالشُّبِ نْامَيَ كِليَة.. إِرَالحيِ ريقِي طَتي فِمَكْى حِلَإِ

V

Dedication

وزمانٍ وقت مَضَاعةَالعلم إلا... ما وقالو لي

فقلتُ وما أدراكُمُ لَعمَْري...بأن العلم منارةُ الإنسانِ

رسالتيأهدي

إلى من ، وسندي في هذه الحياة، الحنان، والقلب الكبيرإلى نبع ، إلى أسباب تكوني بما أكونه الآن

إلى شمسي وقمري.. ،، وأن يكون لي هدف في هذه الحياةتعلمت منهما الصبر والقوة

أبي...إلى أمي و

الصبر تعلمت منهمإلى من ،وفي ضعفي القوة والمدد ،إلى الذين كانوا في منحنيات دنياي السند

،والجلد

..إلى أخواني وأخواتي

نْ كان تاْ لِعيونيْ النُّور والض يَّ م .. و فيْ حر ِ أيَّاميْ ،إلى صديقتيَّ وأختيَّ ،كان تا الظ ل والفيَّ ،و

..(سوزانحياة و)إليكما

جانبي، ومساندتي بفيض من العطف، وبث بي روح إلى والوقوف بنصحييوما إليك يا من لم تبخل

..الآن إليهالكفاح والتحدي لأصل إلى ما وصلت

.. (دأبو المهن)يا أخي الذي لم تلده أمي إليك

،إلى من أروني الحقائق جليَّة ،ومن كانوا لي لا عليَّ ،إلى صناديد أزماتي ،إلى جبال المحامل العتيةَّ

إلى أبناء أختي )المهند، معاذ، محمود(..

.. إلى رفيقات سلاح العلمْ

إلى الرائعات ،إلى صديقاتي الصدوقات بوفائهنَّ ،إلى من خطين معي في حرب الدرس والسلم

،بصداقتهنَّ ومحبتهنَّ

.. (وسام، نور، العنود)

VI

Table of Contents

Page Subject I Title ............................................................................................................... II Authorization ..................................................................................................................

III Examination Committee's Decision ................................................................................

IV Acknowledgment ............................................................................................................

V Dedication .......................................................................................................................

VI Table of Contents ............................................................................................................ VIII List of Tables ..................................................................................................................

IX List of Figures .................................................................................................................

X List of Appendices ..........................................................................................................

XI Abstract in English ..........................................................................................................

XII Abstract in Arabic ...........................................................................................................

Chapter One: General Framework 1 Introduction ............................................................................................................ 1.1

3 Study Purpose and Objectives ................................................................................ 1.2

4 Study Importance ................................................................................................... 1.3

5 Study Problem and Questions ................................................................................ 1.4

7 Study Hypothesis ................................................................................................... 1.5

8 Study Model ........................................................................................................... 1.6

8 Study Procedural Definitions ................................................................................. 1.7

9 Study Limitations and Delimitations ..................................................................... 1.8

Chapter Two: Theoretical Framework and Previous Studies 11 Introduction ............................................................................................................ 2.1

11 Theoretical and Conceptual Framework ................................................................ 2.2

11 Definitions of Independent Variable (Knowledge Leakage Management) ........... 2.2.1

21 Definitions of Dependent Variable (Innovative Performance) .............................. 2.2.2

25 Relationships between Variables ........................................................................... 2.3

27 Previous Studies ..................................................................................................... 2.4

33 Distinctive Features of the Current Study .............................................................. 2.5

Chapter Three: Study Methodology 36 Introduction ............................................................................................................ 3.1

36 Study Methodology ................................................................................................ 3.2

36 Study Population .................................................................................................... 3.3

37 Study Sample ......................................................................................................... 3.4

37 Data Sources .......................................................................................................... 3.5

38 Data Analysis Methods .......................................................................................... 3.6

40 Demographic Description of the Study Sample ..................................................... 3.7

Chapter Four: Data Analysis and Hypothesis Testing 43 Introduction ............................................................................................................ 4.1

43 Description of Statistics of the Study Variables .................................................... 4.2

49 Relationships between Variables ........................................................................... 4.3

50 Hypothesis Testing ................................................................................................. 4.4

VII

Chapter Five: Results Discussion and Recommendation 55 Introduction ............................................................................................................ 5.1

55 Results Discussion ................................................................................................. 5.2

57 Study Conclusion ................................................................................................... 5.3

57 Study Recommendation ......................................................................................... 5.4

60 References ..........................................................................................................................

69 Appendices ........................................................................................................................

VIII

List of Tables Chapter No.-

Table No. Content Page

3-1 Likert-Scale Used with Variables 38

3-2 Internal Consistency Coefficients (Cronbach's Alpha) 39

3-3 Gender Description 40

3-4 Age Distribution 40

3-5 Respondents Educations 41

3-6 Respondents Job Title 41

3-7 Respondents Experience 42

4-8 Mean, Standard Deviation, Ranking and Importance for “Knowledge

Leakage Management” 44

4-9 Mean, Standard Deviation, Ranking and Importance for “Knowledge

Leakage” 44

4-10 Mean, Standard Deviation, Ranking and Importance for “Dynamic

Capabilities” 45

4-11 Mean, Standard Deviation, Ranking and Importance for “Technological

Knowledge” 46

4-12 Mean, Standard Deviation, Ranking and Importance for “Innovative

Performance” 47

4-13 Mean, Standard Deviation, Ranking and Importance for “Market” 48

4-14 Mean, Standard Deviation, Ranking and Importance for “Service” 48

4-15 Bivariate Pearson Correlation (r) Matrix between Independent and

Dependent Variables 49

4-16 Multicollinearity: VIF, Tolerance test 51

4-17 Multiple Regression Analysis of the impact of Knowledge Leakage

Management (Knowledge Leakage, Dynamic Capabilities, Technological

Knowledge) on Innovative Performance.

52

IX

List of Figures Chapter No.-

Table No. Content Page

1-1 Study model 8

4-2 Normality Test 49

X

List of Appendices

No. Content Page

1 The Questionnaire in English 68

2 The Questionnaire in Arabic 71

3 Professors’ Questioner Jury 75

4 List of Members of Association of Banks in Jordan 76

5 MEU's Letter 77

XI

The Impact of Knowledge Leakage Management on Innovative

Performance: Field study in Commercial Banks in Amman

Prepared by

Ahlam Youssef Hassan

Supervised by

Prof. Hebah H. O. Nasereddin

Abstract

The study aims to investigate the impact of knowledge leakage management on

innovative performance in commercial banks in Amman, Jordan. The data have been

collected by using the questionnaire, which distributed to managers and head of

departments working at (21) commercial banks in Amman. Out of (385) collected

questionnaires, (379) were valid for statistical analysis, and (6) questionnaires were

discarded due to large missing data. In addition, the study used the Statistical Package for

Social Science (SPSS) for descriptive statistics. After confirming normality, validity,

reliability and relationships between variables, multiple regressions conducted to test

hypothesis. The results show that there is an agreement on high implementation of

knowledge leakage management sub-variables and innovative performance among

commercial banks in Amman. Additionally, there are relationships among knowledge

leakage management sub-variables, as well as the relationships among innovative

performance dimensions. Furthermore, there are relationships between knowledge leakage

management sub-variables and innovative performance dimensions. Finally, there is

relationship between knowledge leakage management and innovative performance. Results

show that all knowledge leakage management sub-variables have effect on innovative

performance at commercial banks in Amman. The dynamic capability was holding the

highest effect, followed by technological knowledge variable, then knowledge leakage. The

study recommends adopting knowledge leakage management in all industries, because it

affects innovative performance.

Finally, the study recommends the management of commercial banks to develop

appropriate solutions to avoid the risk of weaken performance caused by knowledge

leakage and to provide more efforts to investigate the areas of the leakage in order to be

effectively managed.

Keywords: Management of Knowledge Leakage; Innovative Performance;

Commercial Banks in Amman, Jordan.

XII

ي عماندراسة ميدانية في البنوك التجارية ف :تسرب المعرفة على الأداء الإبداعي إدارة أثر إعداد

أحلام يوسف حسن إشراف

ناصرالدين حسن هبة / دكتورأستاذ ملخصال

في الخدمة السوق و في تسريب المعرفة على الأداء الإبداعي إدارة إلى قياس أثر الدراسة تهدف

دراسةال لعينة الإجابة عن فقرات الاستبانةمن خلال تم جمع البيانات حيث البنوك التجارية في عمان،

مسجلة في الجمعية ال ةتجاريالك و بنمن ال( 21في ) الأقسامرؤساء و مدراءوالتي تكونت من العشوائية

للتحليل كانت صالحة ( استبانة597) ،( استبانة583) تم استرداد (. حيثABJ) الأردنية للبنوك

.بسبب فقدان الكثير من البيانات وذلك لعدم صلاحيتها للتحليل استبانات( 6، وتم استبعاد )الإحصائي

استخدام برنامج الحزمة وذلك بالوصفي الإحصاءتم اختبار فرضيات الدراسة باستخدام وسائل

عرفة فيتسريب الملإدارة اسة إلى وجود أثر توصلت الدر (.SPSSالإحصائية للعلوم الاجتماعية )

.رفة( على الأداء الإبداعيالمعرفة، القدرات الديناميكية، تكنولوجيا المع )تسرب

الأداء و دارة تسرب المعرفةلإ الفرعية متغيراتلالعالي ل التنفيذأظهرت النتائج وجود اتفاق على

لإدارة الفرعيةالمتغيرات علاقات بين هناك أنوتظهر النتائج .في عمان الإبداعي بين البنوك التجارية

أنالنتائج أظهرتللأداء الإبداعي. كما الفرعية المتغيراتعلاقات بين أيضا هناك تسرب المعرفة،

نه يوجد وأخيرا، فإلإدارة تسرب المعرفة وعناصر الأداء الإبداعي. الفرعية المتغيرات مجموعبين العلاقة

أنالنتائج أظهرتإدارة تسرب المعرفة ومجموع عناصر الأداء الإبداعي. متغيراتعلاقة بين مجموع

البنوك لإدارة تسرب المعرفة تؤثر على جميع عناصر الأداء الإبداعي في الفرعية المتغيراتجميع

XIII

تسرب ثم المعرفة،تكنولوجيا ، تليهاتأثير الأعلى القدرات الديناميكية. وكانت التجارية في عمان

.المعرفة

أوصت الدراسة على تشجيع الإدارة العليا في البنوك على تطوير حلول ملائمة وذلك لتجنب د وق

مخاطر انخفاض الأداء الناجم عن تسرب المعرفة وتوفير المزيد من الجهود للتحقيق في مناطق

وذلك ليقوم البنك بإداراتها بكفاءة.تسرب ال

.الأردن، عمانفي البنوك التجارية ؛الأداء الإبداعي ؛ب المعرفةتسرإدارة :المفتاحيةالكلمات

1

Chapter One: General Framework

1.1 Introduction

Knowledge is considered a valuable asset to organizations and essential

factor of economy; it may exist in different areas, databases, functions,

processes, competencies, and obtained by experts. Moreover, managing this

knowledge effectively and achieving the organization's ultimate goal of

gaining the competitive edge, the organizations need to share their knowledge.

Meanwhile, they must work very hard to maintain their knowledge especially

in the appearance of advanced technologies, outsourcing and high level of

global competition.

The dark side of do not properly maintain critical knowledge is the dilemma

so called knowledge leakage, which might lead business environments to

battling strongly to retaining the innovative performance especially for the

pioneers. The world recently is full of companies that exchange knowledge to

achieve their strategic objectives and enhance the innovative performance.

The study has explored the phenomenon of knowledge leakage that focused

on the aspects and concerns associated with knowledge flow inside and

outside, which is involved with the success of innovation activities in

commercial banks in Amman. In order to sustain the competitive advantage

and market share; a key resource needed would be the knowledge; hence, the

role of knowledge is involved in improving the performance and

competitiveness of the economy.

On the other hand, the possible risk of knowledge leakage exposes a threat

to organizational knowledge management (Annan Singh, 2012).The concept

of knowledge leakage has been a significant subject of scholarly study in the

2

new era. Therefore, the motivation behind this study is based on the

identification and characterization of knowledge leakage as well as more

focusing on highlighting different areas of knowledge leakage and proposing

ways of addressing these areas and their effects associated along with

performance. Agudelo et al. (2016) refers to the knowledge leakage as the

accidental or deliberate loss or unauthorized transfer of organizational

knowledge intended to stay within a firm's boundary resulting in the

deterioration of competiveness and industrial position of the organization.

Coraş & Tanţãu (2014) stated that innovation performance is the outcomes

and the benefits generated through the process of innovation, the need to

motivate the innovative performance comes from the idea that innovation has

always been an accompaniment with business. It is represented as one of the

best tool to maintain and enhance the economic development and to improve

the competitiveness in local and global business environment. The earlier

studies of the innovation field, demonstrated that innovative performance

exists in five dimensions, namely; innovation in processes, innovation in

products and services, market innovation, innovation behavior, and finally

strategic innovation.

Many researchers identified different dimensions of innovation (Adaileh &

Abualzeat, 2017). However, in this study it has been decided to observe two of

these dimensions, which are (Market and Service) as they are considered prior

to obtain great achievement in profit, and always linked to successful

business. The innovation in the market as well as in the service provides a

great opportunity for businesses to grow and expand into new areas of banking

field.

3

The concept of knowledge leakage subject has recently become a

significant matter, which has gained a great deal of attention in the academic

and business worlds.

In the light of previous studies, this conducted recently the importance of

analyzing and studying the knowledge leakage management. Accordingly, it

becomes critical to measure the impact of managing this leakage on the

businesses innovative performance on two dimensions, market and service.

Therefore, this study comes to investigate the effect of managing the

knowledge leakage among several areas on innovative performance at

commercial banks.

1.2 Study Purpose and Objectives

This study aims to investigate the impact of knowledge leakage

management on innovative performance; the purposes of this study are to:

Investigate the impact of knowledge leakage management (knowledge

leakage, dynamic capabilities, and technological knowledge) on

innovative performance.

Investigate the impact of knowledge leakage on innovative

performance.

Investigate the impact of dynamic capabilities on innovative

performance.

Investigate the impact of technological knowledge on innovative

performance.

The study aims to show how banks management implements the

Knowledge Leakage Management. Furthermore, provide recommendations to

4

the studied industry, other industries, and decision makers who have concerns

about knowledge leakage management and innovative performance. Finally,

provide a study related to knowledge leakage management research stream

and open a discussion related to manage the knowledge leakage in other

industries in Jordan.

1.3 Study Importance

The importance of this study is to develop a model to examine the effect of

knowledge leakage management on innovative performance. Additionally,

this would make a significant enhancement contribution for all variables,

which focused on very critical dimensions that consisted of knowledge

leakage and innovative performance.

Based on Annan Singh (2012), the importance of exploring and maintaining

the risks related to managing knowledge and the relevance of incorporating

this outline with the strategic management policy of the organization, which

become a principal for success. Moreover, the study came from the

importance of studying innovation environment that has become more

complex and uncertain, which imposed innovative organizations, such as

banking sectors to obtaining the necessitate knowledge externally as well as

internally, for exchanging knowledge and resources.

Sharing knowledge help organizations to take advantages out of the

knowledge integration and specialization; as a result, the innovative capacity

could be increased, but the benefits achieved might be limited due to the

leakage of knowledge.

5

On another hand, the study helped to understand what does managing

knowledge leakage mean, and the importance of being aware of this issue in

banking sector.

The results from this thesis revealed useful information, and provided good

knowledge for commercial banks that might help and aid businesses to be

more conscious and responsive toward the knowledge leakage phenomenon in

the future. Finally, the study provided recommendations for future work based

on data collected and accordingly the results of analysis.

1.4Study Problem and Questions

By interviewing different managerial positions in banking industry;

especially with whom interested in innovation, the study has observed that

many threats related to knowledge leakage have been recently raised due

several reasons, obviously, bank's profits could be lost if knowledge has been

leaked.

Referring to Durst et al. (2014) it has been described that whether

organizations are aware of knowledge leakage directed via people, as well as

the positive or negative consequences that can be resulted, they are still not

fully acquainted by the concept of knowledge leakage nature and that required

a profound understating of this phenomena.

According to Lotfi et al. (2013) surviving and competing in today’s global

economy and uncertain environment leads organizations for a strong needs to

create, share and disseminate up-to-date and appropriate knowledge and

information. Therefore, sharing knowledge is very important for the high level

of competition between organizations. Unfortunately, on the other side this

might lead to unwanted result, which is called knowledge leakage.

6

After reviewing previous studies related to knowledge leakage issue, the

study found a lack in researches associated with knowledge leakage problem

in different sectors. Adaileh & Abualzeat (2017) mentioned that studying

knowledge leakage should be directed to other sectors. For instance, services

sectors such as technology or banks. Knowledge leakage management could

be arising in many areas and the most three cited areas were as following, the

first one is the knowledge leakage specifically in the tacit and explicit

knowledge; secondly is the area of the dynamic capabilities such as in

knowledge intensity, R&D and core competencies, as well as the third, which

delve the technological knowledge area.

Accordingly, the study will discover the banks' concerns, which have

become recently beyond surviving only to sustain. Hence, it is lately battling

to achieve uniqueness through innovative performance. A lot of money, time,

and efforts have been invested to gain this objective using knowledge as one

of the most valuable strategic assets.

In the light of what mentioned above, organizations need a precise answer

for the following questions to avoid knowledge leakage: what kind of

knowledge has the possibility to leak or loss? What are consequences of the

leakage? Providing such answers is more challenging than it looks, as this

issue has been observed in this study.

A model may help managers to depict the impact of managing knowledge

leakage, which allow identifying the knowledge leakage activities and

practices that brings harm and problems.

This study is trying to answer the below questions:

The main question:

7

Does managing knowledge leakage impact innovative performance at

commercial banks in Amman, Jordan?

According to knowledge leakage management components the main

question can be divided into the following sub-questions:

Does knowledge leakage impact innovative performance at commercial

banks in Amman?

Do dynamic capabilities impact innovative performance at commercial

banks in Amman?

Does technological knowledge impact innovative performance at

commercial banks in Amman?

1.5 Study Hypothesis

This study tested the hypothesis according to the above questions and

objectives as following:

H₀1: There are no impacts of Knowledge Leakage Management sub-variables

(Knowledge Leakage, Dynamic Capabilities, and Technological Knowledge)

on the innovative performance, at ( ≤ 0.05).

According to Knowledge Leakage Management sub-variables the main

hypothesis can be divided into the following sub-hypotheses:

H₀1.1: There is no impact of Knowledge Leakage on the innovative

performance, at ( ≤ 0.05).

H₀1.2: There is no impact of Dynamic Capabilities on the innovative

performance, at ( ≤ 0.05).

8

H₀1.3: There is no impact of Technological Knowledge on the innovative

performance, at ( ≤ 0.05).

1.6 Study Model

Figure (1): Study Model

Sources: This model has been adopted based on the following studies: for independent

variable: (Annansingh,2012; Nunes et al., 2006;Aladwan, 2017; Kaplinsky et al., 2006;

Agudelo et al., 2016). For dependent variable: (Dhanaraj & Parkhe, 2006; Adaileh

&Abualzeat, 2017).

1.7 Study Procedural Definitions

Knowledge Leakage Management: the process of managing and

protecting knowledge to prevent the leakage of this knowledge to other parties

through different areas for maintaining innovative performance.

Ho1

Ho1.1

Ho1.1

1.1

Ho1.2

Ho1.3

Dependent Variable

Innovative Performance

Independent Variable

The Management of

Knowledge Leakage

(Market,

Service)

Knowledge

Leakage

Dynamic

Capabilities

Technological

Knowledge

9

Knowledge Leakage: the probability of knowledge that is critical to the

organization being lost or leaked through the creation, acquiring, sharing and

applying knowledge between employees and management to a competitor or

unauthorized personnel whether intentionally or unintentionally.

Dynamic Capabilities: the capability of banks management to integrate,

build and maintain knowledge related to internal competences in order to

enhance the innovation environment.

Technological Knowledge: the risk of leaking knowledge owned by a bank

through advanced technologies.

Innovative Performance: the use of an idea in a creative ways to improve

the products, processes or procedures in order to increase the level of the

performance specifically in market and services.

Innovation in Market: innovation in the market refer to the innovation

related to the market research, advertising and promotion, as well as

identifying new market opportunities and access to new markets in banking

sector.

Innovation in Service: the definition of innovation in the service according

to this study is defined as a novelty and significance of the new services

offered by banking sector at the right time and to right population.

1.8Study Limitations and Delimitations

There are number of limitations for this study:

Human Limitation: This study carried with top and middle management in

Commercial Banks in Amman.

10

Place Limitation: This study has been conducted at commercial banks in

Amman, Jordan.

Time Limitation: This study was conducted within the period between the

first and the second semester of the academic year 2017/2018.

Scientific Limitation: The study has concerned by the knowledge leakage

management sub-variables, which consisted of (knowledge Leakage, Dynamic

Capabilities, Technological Knowledge) and their impact on innovative

performance in tow dimensions (Market and Service).

Study Delimitation: This study was implemented at Commercial Banks in

Amman, Jordan. The study results were restricted only at the management of

Commercial Banks. The responses of other positions; hopefully would be a

reflection of the psychological impression of the commercial banks

management at that point of time.

11

Chapter Two: Theoretical Framework and Previous

Studies 2.1 Introduction

The following chapter reviewed the related literature and previous relevant

studies that are related to Knowledge Leakage Management and Innovative

Performance. The last section contains an overview of the previous studies

concerning the same research problem or has the same study variables.

2.2Theoretical and Conceptual Framework

This section includes many aspects observed through past studies, which

related to the variables knowledge leakage and innovative performance as well

as their dimensions.

2.2.1Definitions of Independent Variable (Knowledge Leakage

Management):

Knowledge

First of all the studies captured the knowledge concept from King (2009)

who mentioned that it is the knowledge embedded in business processes,

activities, and relationships that have been created over time through the

implementation of a continuing series of improvements. Nazick (2014) has

defined knowledge as the facts, skills and understanding that person has

gained, through learning or experience, which enhance the ability of

evaluating context, making decisions, and taking actions.

Knowledge is commonly categorized in many various types; the most

fundamental distinction is between “tacit” and “explicit” knowledge.

12

Kaplinsky et al. (2006) refers to tacit knowledge as ideas, procedures and

routines, which are stuck in the minds of individual people, groups of people

and organizations, which function through unconscious processes and

informal interactions rather than as rules-based behavior, procedures and

systems. Dewah (2013) suggested that tacit knowledge is the most important

category of knowledge because it is used for innovation. On the other side,

explicit knowledge has been defined by King (2009) as the knowledge exists

in the form of words, sentences, documents, organized data, and computer

programs and in other explicit forms. Nonaka (2008) referred to the process of

converting tacit knowledge to explicit as it has a direct implication for many

things. First of all, on how a company designing its organization managerial

roles and responsibilities inside these organizations. The second thing, the

structures and practices that translate a company's vision into innovative

technologies and products.

Amongst business, there are two types of knowledge mentioned by

Aladwan (2017) namely explicit and tacit knowledge, the first, refers to

codified knowledge, such as that found in documents, while the second refers

to non-codified and often personal or experience based knowledge. Ahmadi et

al.(2014) stated that tacit knowledge is constructed gradually; so it requires a

long time and should be avoided from wasting it. Moreover, Dalkir (2011)

suggested in his book that conversion of tacit to explicit knowledge must be

accomplished without significant loss of knowledge. Tacit and explicit

knowledge should be seen as a sequence rather than as definitive points, and

all knowledge is a mixture of tacit and explicit elements rather than being one

of them or the other.

13

According to Farashahian & Abbasi (2013) a firm that effectively manages

knowledge is likely to be considered a learning organization. Knowledge

dissemination and responsiveness to knowledge are mentioned repeatedly as

the most effective way to a gain competitive edge. Therefore, as mentioned by

Aladwan (2017) it is very important for organizations to protect their

knowledge, as that became a key asset for an organization. In addition, the

nature of work has been changed significantly throughout the importance of

intellectual work, which always confronting a significant increment.

Moreover, knowledge provides a source of competitive advantage.

Knowledge is more than just information and data; it can be described as

the fluid mix of framed experiences, values, contextual information and expert

insight (Ahmad et al., 2014).

The study here had attended a great attention to knowledge; as it is critical

to banks field, as leaking of knowledge might lead to a massive detriment in

performance.

Knowledge Leakage Management:

A proper understanding of Knowledge Leakage will add value to

organizational knowledge. Knowledge management is defined as the ability to

link and to manage knowledge that captured or created from companies

employees or from companies’ external environment, and to share it with the

right employees at the right time. The processes includes; knowledge creation,

knowledge acquisition, knowledge sharing, and knowledge application

(Aladwan, 2017).

The findings of Blücher & Karrbom (2014), recommended that the

processes of management systems need to have a proper tools, such as

14

templates, checklists and guidelines. In addition, feedback tools for

performing environmental tasks quickly include an effective search function

to improve the accessibility, finally, encourage employees to enter suggestions

and opinions, which will contribute to the knowledge sharing in the company.

Furthermore, the employees have to obtain an adequate knowledge about

sustainability in order to be able to use those tools and to be successful in

sustainable management. According to King (2009), knowledge management

involves processes that develop systems and methodologies to support each

process and to motivate employees. These processes include; creation,

refinement, storage, transfer, sharing, and utilization of the knowledge.

Almaani (2009) mentioned knowledge management as knowledge creation,

knowledge application, knowledge sharing, knowledge storage and finally

technological knowledge management. Moreover, the study would relate

innovation to knowledge management as mentioned by Tidd et al. (2005), that

innovation could enhance competitiveness; however, it involves a different set

of management knowledge and skills from individuals of everyday business

administration.

Knowledge is highlighted by Nunes et al. (2006) that could be better

managed and stored within the organization and this probably result in greater

innovation and profitability. Hence, based on Ilvonen (2018) knowledge

management through creation, sharing and implementing process have been

researched expansively and determined the intensive need for knowledge

security and knowledge protection in order to avoid the leakage.

For this study, knowledge management can be defined as the ability to

manage and protect knowledge through processes of creation, acquiring,

15

sharing and applying knowledge internal or external of commercial banks

environment for maintaining innovative performance.

There are several of implications of knowledge leakage or as

interchangeably used term knowledge loss; moreover knowledge leakage has

either positive or negative implications; the negative one occur in some

harmful sequences such as loss of competitive edge, decreased productivity

and affects organizational performance negatively (Baporikar, 2017). This

section dealt with the actual knowledge leakage, the three areas that involved

in knowledge leakage management are:

Knowledge Leakage:

Information and knowledge leakage has been globally recognized by

organizations since the incident of information leakage by Edward Snowden

in 2013 (Hassan & Nasereddin, 2018). knowledge leakage is defined by

Kaplinsky et al. (2006), as the probability of information or knowledge that is

critical to the organization being lost or leaked to a competitor or unauthorized

personnel whether intentionally or unintentionally. While Jiang et al. (2013)

has defined the incident of knowledge leakage as the extent to which the focal

firm’s private knowledge is intentionally appropriated by or unintentionally

transferred to the partners. Menkhoff et al. (2011) explained leaking

knowledge as the change of knowledge from one domain into another.

Moreover, Annan Singh (2012) define knowledge leakage as the probability

of information or knowledge that is critical to the organization being lost or

leaked to a competitor or unauthorized personnel whether intentionally or

unintentionally.

16

Therefore, leakage is a key concern in organizations and an important

subject of research. Ahmad et al. (2014) pointed out that leakage could have a

variety of impacts on organizations including reputational damage, loss of

revenue, costs arising from breaches of confidential agreements and loss of

productivity.

Based on the value of knowledge as an important resource, required

remaining the competitive edge as mentioned in the previous studies. Durst &

Ferenhof (2014) addressed areas of knowledge reservoir where existing

knowledge at the mercy of "Leakage" in order for managers to cope better

with challenges related to knowledge leakage.

An organization maximizes the value it achieves through one of its most

important assets that is knowledge and people are responsible to protect

knowledge from leakage, but only a few companies have ones with

responsibility to directly protect intellectual capital and innovation; their

responsibilities according to Dalkir (2011) include goals such as repeat

successes and share best practices as well as avoiding knowledge loss and

leakage after organizational restructuring.

Knowledge leakage has two form recognized by Baporikar (2017) as

voluntary or involuntary, which either have negative or positive impact on the

organizations, voluntary leak of knowledge is linked to legal knowledge

transfer and in the interest of the of the organizations, while the involuntary

leak is linked to an authorized transfer or Loss determined by some

circumstances, which effect organization. Annan Singh (2012) talked about

one reason for leakage; as it might be occurred if knowledge management

models failed to consider the protection of knowledge within the organization

and across it boundaries. Therefore, it is recommended that once the risk

17

assessment process is completed, risk thinking on knowledge exposure and

leakage should not be abandoned. Accordingly, Durst & Ferenhof (2014) have

affirmed that knowledge leakage is categorized into knowledge, capability

shortage and knowledge exposure.

Knowledge exposure concerns should be part of the continuous risk

management approach from the beginning of a project until the outcomes are

realized. Knowledge leakage risks should be continually assessed and

monitored and whenever the contingency measurement is demanded.

Knowledge Loss:

Several authors have used the leakage expression in knowledge

management and innovation researches as mentioned by Frishammar et al.

(2015), while others have used another expressions, such as knowledge loss,

knowledge fraud, exchanging information in an unbridled unmonitored and

unregulated way, losing control of technological assets, also disproportionate

or unilateral loss of organization's core capability or skill. Currently,

knowledge is produced in a great quantity and spread around the globe at the

most increasingly rate. There is not only an abundance of knowledge but also

an increasing literature on the creation of new knowledge; also on the sharing

knowledge issue and the productivity of new knowledge. There are various

risks and disadvantages could exist because of the process sharing knowledge

and the aspect, which has been largely absent from this debate, namely the

loss of knowledge according to (Hassan & Nasereddin, 2018). Daghfous et al.

(2013) have defined knowledge loss as the intentional or unintentional

evaporation of knowledge that accumulates from learning and from individual

and collective actions.

18

According to Menkhoff et al. (2011), knowledge loss does not always mean

that the knowledge has been destroyed or lost entirely from the universe.

Rather it may be leaked from system's perspective, this demonstrate that

knowledge has been lost form the community or knowledge system. It is

labeled here as leakage, a form of knowledge loss, which is perhaps less

dramatic than knowledge destruction. The impact on the community is

perhaps similar in that their access to the knowledge is potentially retrievable

and does continue to exist in another knowledge system, with which

knowledge sharing should still be possible. Thus, leakage is the least dramatic

form of knowledge loss.

The results found by Janoszka & Skulska (2015), the study confirmed that

firms are engaging activity of knowledge protection when their managements

experience high levels of staff outflow, especially the majority of used

mechanisms, which belong to supporting technologies and operational areas of

knowledge protection. There are many impacts of knowledge loss on

organizations; based on Joe et al. (2013), knowledge loss could affect an

organization's credibility with their client, because a company might perform

less well and this is happened due to the probability of low quality products,

or any other reason that lead to the loss of clients, in addition, it lead to a

tremendous decrease in revenue. Therefore the study suggested a solution to

organizations by giving more efforts to establish effective knowledge

management system. One of the countless benefits is that both old and young

employees can transfer knowledge between them effectively and use it in an

efficient way.

Risk of knowledge leakage is a significant problem recently mentioned by

Agudelo et al. (2016) and increased as a part of knowledge sharing activities

19

due to the technological adoption in knowledge intensive organizations

operating in extremely high competitive environments. Hence, organizations

have increasing need for strategies to manage the leakage in order to mitigate

this risk.

Dynamic Capabilities:

The concept of dynamic capabilities is built on the resources based view;

Teece et al. (2017) has defined dynamic capabilities as the ability of firms to

integrate, build, and reconfigure internal and external competences in order to

deal with rapidly changing environments. Dynamic capabilities are considered

by Rehman & Saeed (2015) as a perspective that emphasizes on the distinct

resources of the firm, which leads to the sustainable competitive advantage. In

addition, dynamic capabilities identified by the organizational need and

external opportunity for change, seize opportunities by utilizing and

restructuring internal resources (Žitkienė et al., 2015).

Basically, the accumulation of dynamic capabilities is contributing to

innovation. Referring to Kaplinsky et al. (2006), dynamic capabilities are one

of the areas that could be exposure to knowledge leakage. Dynamic

capabilities highlighting core competence, productivity, knowledge intensity,

Human resource management and R&D. Chigada & Ngulub (2015) informed

that dynamic capabilities created through the acquisition, creation, sharing and

retention of knowledge and eventually lead to increase the effectiveness of

knowledge organization. This knowledge is intended to lead an organization

to improve best practices in business. Furthermore, Chan et al. (2006) argued

that dynamic capabilities and core competencies originated largely from the

resource-based view of organizations.

20

External knowledge sharing often demands resources, firms are tend to

learn how to improve the ability of acquiring knowledge in return for shared

knowledge. Such interactions facilitate the development of core competencies

necessary for innovation (Ritala et al., 2015). Nevertheless, it was posited by

Frishammar et al. (2015) that an organization in a supply chain network may

have a hiding agenda to leak knowledge and to weaken the focal firm; besides,

organizations that directly connected to the focal firm may limit the flow of

leaked knowledge to improve their own competitive position.

In summary, protecting knowledge in these areas in banks industry is

necessitate reducing the risk of leaking knowledge to rivals and thus impacts

the performance negatively.

Technological Knowledge:

Durst & Ferenhof (2014) associated knowledge leakage with technology

and define it as the risk of loss of knowledge owned by a company through

technologies. Rauscher (2009) discussed knowledge through technology as a

special use of knowledge that runs through a wide range of human actions,

this kind of knowledge is constructed through the use of advanced

technological tool. According to Serna et al. (2017), the cost of every security

problem in business is the average of US$2.8 million. Besides, organizations

spend US$1.2 million on average to investigate and to assess breaches of

information. From Astani et al.(2013) point of view, a significant number of

employees from technological sensitive industries, such as banking,

connecting their mobile devices to unsecured public Wi-Fi networks (i.e.,

technological context, environmental context), which exposes the device to

21

the security vulnerabilities of those networks and may be used as a mean to

leak knowledge.

According to Agudelo et al. (2016), technical factors include many things,

such as infrastructure, shared technology, and system integration, technology

services inside and outside the organization. In addition, it is obvious that

although the technical capabilities facilitate the conditions for knowledge

accumulation, it can also make a challenge for knowledge protection due to

the excessive reliance on technical controls to protect organizational

knowledge assets, which may lead to make the security a very hard task.

Based on Serna et al. (2017), recent literature also is showing how

organizations are struggling with leakage of sensitive organizational

information through different ways, such as social media, cloud computing

and portable data devices. Although much of the literature has focused on

technical aspects of leakage (i.e., data and information), limited papers have

been conducted on knowledge leakage particularly through new electronic

technologies. While the use of these technologies facilitated various processes,

it comes at a high security cost. Furthermore, sharing knowledge activities

through using of such devices by employees caused problems for

confidentiality. Challenges in confidentiality occur as a result of employee’s

security misbehaviors. Therefore, the focus should shift from technological

issues (example firewall and antivirus) and formal issues (for example:

policies, standards and procedures) controls to humanity factors.

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2.2.2Definitions of Dependent Variable (Innovative performance)

Innovation:

Today's environment is characterized as unpredictable and unstable,

businesses must continuously change and adapt to survive. New ideas,

strategies, process, and the most important things new market, products and

services lead to innovation in order to keep up with volatility. Innovation is

the application of new and improved ideas, procedures, goods, services and

processes that bring new utility or quality used in the application (Mataradzija

et al., 2013).

Many authors in literature have defined Innovation. Most of the definitions

share the same characteristics and might vary slightly in some details. Cocco

& Quttainah (2015) described innovation as the design, invention,

development or implementation of new or altered products, services,

processes, systems, organizational structures, or business models for creating

new value for customers and financial returns for the firm. Innovation can be

defined also as the adoption of a new idea or behavior in the products,

services, systems, policies and programs of the organization in order to adapt

to the environment and to maintain effectiveness and competiveness

(Almadani & Andersson, 2016). Simultaneously, the researchers mentioned

that innovation is a core feature in the culture of the new innovative

competitors, which distinguish them from traditional banks.

Forés & Camisón(2016) divided innovation into two categories, radical and

incremental. Radical innovation results in fundamental changes in the

processes, products, structures technologies and methods of the organization

23

while Incremental innovation results in the refinement of theses aspects of the

organizations.

According to Sprenzel (2015), value innovation is the key to generate new

competences especially for banks as they have a central economic role and

decades of experience in this matter. Yiadom (2012), innovation takes time to

spread through the social system and innovation dissemination process is a

new idea becoming widespread from its source of invention or creation to its

ultimate users or adopters.

Innovative Performance:

Knowledge is an essential instrument for Innovative performance. There are

many aspects for keeping knowledge from leak or lost in order to maintain

innovativeness. Based on Dalkir (2011), people responsible for knowledge to

ensure maximizing the value of organization; few companies have jobs with

this responsibility including titles as director of intellectual capital or director

of innovation; their responsibilities contribute to many goal such as improving

innovation and the commercialization of idea as well as avoiding knowledge

loss or leakage after organizational restructuring. Additionally, Hagedoorn &

Cloodt (2003) mentioned that it certainly appears that research and

development expenditures patents and new product announcements are the

most appropriate indicators of innovative performance. Hanifah et al. (2017)

have defined Innovative Performance as the use of an ideas or creativity to

improve the products, processes, procedures that increase the significance,

usefulness and performance of the products and services.

The importance and critical role of innovative performance in organizations

has been mentioned by Tidd et al. (2005) according to them; innovative firms,

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which are able to use innovation to improve their processes or to differentiate

their services, measured in terms of market share, profitability, growth or

market capitalization. Innovative performance has many dimensions; the two

common dimensions of innovative performance are market and service.

Market:

Competitors may introduce new products, which represent a major threat to

existing market positions. In all these ways firms need capabilities to respond

through product innovation (Tidd et al., 2005). According to Adaileh &

Abualzeat (2017) Innovation in the market, refer to the innovation related to

the market research, advertising and promotion, as well as identifying new

market opportunities and access to new markets. It has been noted that a firm

that is able to create more value than its rivals has a competitive advantage.

Moreover, value creation is reliant on the firm’s ability to innovate

successfully (Adner & Kapoor, 2010). Generating innovations with

commercial value is attracting the attention of competitors, who are trying to

enter the same markets or imitate the innovation; accordingly, firms indeed

may produce protective mechanisms in order to prevent or limit the imitation

of its core knowledge assets and innovations (Olander et al., 2014).

Maintaining knowledge must take into consideration as Almadani &

Andersson (2016) mentioned that the internal market function of Banks

enables the transfer of knowledge, which is considered as an important factor

for successful innovations.

Service:

Innovation in services is a complex and multidimensional subject that

analyzed though different context, perspectives, and need for strategies that

25

largely depend on unpredictable changes of customer's demand or through

direct usage of assets (Žitkienė et al., 2015). The definition of innovation in

the service in this study is as a novelty and significance of the new services

offered to the market at the right time (Adaileh & Abualzeat 2017).

Some traditional banks are stuck in their old ways, and have ignored

superior new alternative services. This could lead them to lose the competition

as Yiadom (2012) noted that banking domain is one of the most competitive

market in the world over, so new services are used as important instruments

although they certainly contain risks. Innovative banking products and

services must be convenience, reliable, secure and ease to use. Moreover,

Yiadom (2012) posited that there have been immense innovations in Banks

sector due to the entry of private banks into the market and the expansion of

branches of existing banks. As well as the development of new technologies to

deliver financial services, such as Automated Teller Machines (ATMs),

Electronic Funds Transfer at Point of Sale (EFTPOS) and other stored value

cards. Furthermore, Tidd et al. (2005) revealed that new products help capture

and retain market shares, and increase profitability in those markets.

Innovative service introduction is very risky, this require firms to cooperate

for research and development R&D. Firm may leak directly or indirectly to

supplier ever competitors (Ji &Yang, 2010). Being able to offer better service

(faster, cheaper and higher level of quality) has been seen broadly as a source

of competitive edge. For example the first bank that offer automated telling

machinery (ATM) service developed a strong market position and considered

as a technology leader (Tidd et al., 2005).

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2.3 Relationships between Variables

Some studies examined the relationship between one of knowledge leakage

management sub-variables (Knowledge Leakage, Dynamic Capabilities,

Technological Knowledge) with innovative performance dimensions.

However, few researchers studied the relationship between knowledge leakage

and innovative performance, for example. Adaileh & Abualzeat (2017)

focused on investigating the impact of knowledge sharing across the on the

innovative Performance taking into account the role of knowledge leakage of

significant business process in organizations. Gulías et al. (2018) have

explored whether the knowledge leakage decided the innovative performance,

regional level, technological level, production level, and human capital level

have been considered. The relationship between knowledge leakage and

innovative performance is investigated in several studies in the conceptual

framework of producing knowledge through primarily accumulative dynamic

capabilities also through technologies. The main idea is that knowledge

leakage may offer additional know-how to organizations that are able to

understand such knowledge and add it with internal already existing

knowledge. Annan Singh (2012) used a case study approach to investigate the

risks of Knowledge Leakage could be occurred during the process of

managing the process whether deliberately or accidentally. Olander et al.

(2014) mentioned Reasons for choosing mechanisms to protect knowledge

and innovations and the study identified statistically significant relationships

between the protection need and firms' strategy. The results indicated that

there is inconsistency in the use of mechanisms when there is a specific

motivation for the need of knowledge protection, and when the organizations

are confronting difficulties related to protection issues.

27

One of the previous study showed that knowledge leakage could induce the

relationship between knowledge leakage and innovative performance. In a

recent study, Arvanitis et al. (2016) investigated the relationship between

knowledge leakage and innovation performance and the results demonstrated

that the possibility of introducing a product innovation is negatively associated

with technological leakage, opposite of the other studies findings.

Based on Adaileh & Abualzeat (2017) finding, which indicated that some

of knowledge leakage has the probability to be beneficial to companies and

may have a positive impact, especially when sharing knowledge with

customers and competitors in order to develop innovation in different markets

and services.

2.4 Previous Studies

The previous studies review is mentioned to establish how other scholars

investigated the same problem as following:

Hagedoorn & Cloodt (2003) study entitled “Measuring innovative

performance: is there an advantage in using multiple indicators?”,

explored the loss of organizational knowledge during organizational change

processes from a knowledge perspective and the measurement of innovative

performance of companies. The paper studies the innovative performance of a

large international sample covers approximately 1200 companies in four high-

tech industries, using a variety of indicators. These indicators range from

R&D inputs, patent counts and patent citations to new product

announcements. The study found that a composite construct based on these

four indicators clearly catches a latent variable innovative performance.

28

Treleaven & Sykes (2005) study entitled “Loss of organizational

knowledge from supporting clients to serving head office”, investigated the

loss of organizational knowledge during organizational change processes from

a knowledge perspective. The investigations demonstrate how practices of

financial management are displacing organizational knowledge of

practitioners. An example is given of how organizational knowledge is

vulnerable to be insignificant, and thus loss. It is concluded that these losses of

organizational knowledge are the effects of reorganizing around corporate

managerial level without attention to different evaluations of significance.

Ji& Yang (2010) study entitled “The impact of private information

leakage on innovative product introduction”, explored that incumbent’s

private demand forecast information and core component development

knowledge via supplier to entrant. The finding demonstrate that when

incumbent demand forecast information is leaked to entrant, entrant ability to

evaluating demand information impact incumbent decision only when

proportion of price of entrant to incumbent lower than some threshold. That is,

entrant sell price is lower, it is more beneficial for incumbent; On the other

hand, when incumbent core component development knowledge is leaked to

entrant, entrant ability to parsing development knowledge influence

incumbent decision only when proportion of entrant cost to incumbent cost

higher than some threshold, furthermore, incumbent profits decrease in this

cost ratio when this ratio higher than some threshold. Finally, it has been

discovered that leakage of these two types of information has opposite impact

on incumbent. The result shows that information leakage may result in

negative environmental externality because counterfeiters quality of imitation

29

product is inferior, customer may discard product that not well satisfy

requirement.

Annan Singh (2012) study entitled “Exploring the Risks of Knowledge

Leakage”, aimed to explore the risk of knowledge leakage and determine

whether risks identified from the case study are a true representation of

perceptions in the sector. The tool used was a postal questionnaires, which

been sent to SMEs and targeted a wide group within the organization with

different job functions. 300 companies were selected as matching the criteria

of designing and developing 3D models. The results of the study shows that

even the best laid KMP policy or framework can be source of KL due to the

absence of an integrated risk management approach.

Daghfous et al. (2013) study entitled “Understanding and managing

knowledge loss”, explored the drivers and impacts of knowledge loss

explored as well as associated retention strategies within manufacturing and

service operations. The author follows a multiple case study approach with

theoretical sampling of manufacturing and service firms. The results of this

study suggest that organizations should retain and diffuse architectural

knowledge, improve strategic coordination among units, develop existing

capabilities through different networking strategies and more effective

networks, and transform these capabilities into effective organizational

routines to mitigate knowledge loss and increase knowledge retention.

Meanwhile, relying solely on standard operating procedures, information

systems, and codification of knowledge in databases could undermine

knowledge retention and lead to knowledge loss.

30

Joe et al. (2013) study entitled “Knowledge loss when older experts leave

knowledge-intensive organizations”, purpose was to describe the different

concepts of valuable knowledge that are perceived to be lost when an older

expert departs from a knowledge-intensive organization. A multiple case

research methodology has been used and interviews involving 17 participants

from five small to medium enterprises. The paper finds five concepts of

valuable knowledge have emerged from the interviews: subject matter

expertise; knowledge about business relationships and social networks;

organizational knowledge and institutional memory; knowledge of business

systems, processes and value chains; and knowledge of governance.

Ahmed et al. (2014) study entitled “Protecting organizational competitive

advantage: A knowledge leakage perspective”, observed the strategic

management literature and emphasizes the importance of protecting

organizational knowledge and information, especially in terms of maintaining

competitive advantage. Several mechanisms have been created from the

literature that organizations could deploy to protect their knowledge and

information. Mechanisms were deployed in 11 knowledge intensive

organizations. The study revealed unexpected findings: first, there was no

evidence of a systematic and comprehensive management approach to the

identification and protection of knowledge assets. Approaches were often

randomly operated in a bottom-up manner with much of the responsibilities

assigned to individual employees and knowledge owners. The second thing,

concerns about confidentiality of organizations’ operational data for example

client details, often out of the managerial attention to protecting organizations’

own knowledge and information assets. Accordingly, several implications

31

have outlined for future research, including the need for more comprehensive

frameworks to concentrate on knowledge leakage from a strategic perspective.

Durst & Ferenhof (2014) “Knowledge Leakages and Ways to Reduce

Them in Small and Medium-Sized Enterprises (SMEs)”,aimed to address

knowledge leakages in small and medium-sized enterprises and conduct a

framework to properly manage their knowledge in order to address this

challenge and finds ways to reduce the danger of knowledge leakages. The

framework highlights six areas of knowledge leakage, the key drivers of

knowledge leakage (suppliers, customers, competitors, non-competitive

organizations, human resources). Items could be tested within a sample of

small firms and a sample of medium-sized firms as well as in different sectors.

One of the results indicated that avoiding Knowledge leakage is not simple in

many situations, for example if an innovative or an integrated product is

developed. The paper’s findings may enable an increased awareness towards

the areas where existing knowledge is at the mercy of “leakage”. This can

assist managers of SMEs to better cope with risks related to knowledge

leakage and, therefore, better exploit the limited knowledge base available.

Rehman & Saeed (2015) study entitled “Impact of Dynamic Capabilities

on Firm Performance: Moderating Role of Organizational

Competencies”, the phenomenon of organizational performance with the lens

of dynamic capabilities observed by this study, which investigates the impact

of dynamic capabilities on organizational performance, taking organizational

competencies as moderating variable. The research posits that dynamic

capabilities have a direct impact on the organizational performance of the

firm. It also confirms that organizational competencies have positive

moderating role in relationship of organizational performance and dynamic

32

capabilities. This implies that the direct relationship between dynamic

capabilities and performance is significant.

Ritalaet al. (2015) study entitled “Knowledge sharing, knowledge leaking

and relative innovation performance”, focused on the effect of external

knowledge sharing on firm's innovation performance, which taking into

account the accidental and intentional leakages of business-critical knowledge.

The topic of the study is important due to the growing complexity and the

progressively networked nature of innovation. The findings demonstrate that

firms that reciprocally share knowledge with external partners for their own

innovation purposes must be especially aware of the potential for knowledge

leakage and the harm such leakage can cause. By engaging in external

knowledge sharing, firms increase the risk that confidential knowledge might

accidentally or intentionally leak to those outside the firm's boundaries.

Agudelo et al. (2016) study entitled “Mitigating Knowledge Leakage

Risk in Organizations through Mobile Devices: A Contextual Approach”,

a theoretical conceptual model provided to identify the determinants that

influence knowledge leakage risk (KLR) through the use of mobile devices

and also to present how such factors inform organizational KLR mitigation

strategies to safeguard associated with leakage incidents. This study is the first

attempt to view KLR through mobile devices in organizations from a mobile

usage perspective using a contextual approach combining human, enterprise

and technological dimensions, by analyzing the determinants that influence

the knowledge leakage risk through mobile devices in organizations.

Addressing not only technological aspects but also human and organizational

aspects, the proposed model presents a better way to design mitigation

strategies and leakage risk controls.

33

Aladwan (2017) study entitled “The Impact of Knowledge Management

Processes on Workforce Agility: An Empirical Investigation at

Pharmaceutical Companies in Jordan”, investigated the impact of

knowledge management (KM) processes (creation, acquisition, sharing, and

application) on the workforce agility (proactive, adaptive, and flexible). The

study used questionnaire to collect data. The study finds that there is a high

agreement with KM processes and workforce agility in pharmaceutical

companies in Jordan. The author recommended that companies have to adopt

top level management for KM processes companies should encourage them to

apply KM processes through various training programs. In addition,

companies should prepared different training programs for top-level

management to enhance their abilities, knowledge and skills.

Adaileh & Abualzeat (2017) study entitled: “Impact of Knowledge

Sharing and Leakage on Innovative Performance”, investigated the impact

of knowledge sharing across the supply chain on the innovative capabilities

(Innovative Performance), considering the role of knowledge leakage of

significant business process in organizations. Questioner used as a tool and

has been sent by e-mail another tool was the directly interviewing people.

Samples include executives, organizational unit managers, operations

managers and staff, in addition to the owners and an appropriate sample of

600 industrial companies from different areas in Saudi Arabia's cities. Finally,

finding indicated that knowledge leakage negatively mediate the positive

impact of knowledge sharing on innovation performance, and some of leakage

may be beneficial and have a positive impact, especially when sharing

knowledge with customers and competitors in order to develop market

innovation.

34

Ilvonen et al. (2018) study entitled: “Towards a Business-Driven Process

Model for Knowledge Security Risk Management Knowledge”, suggested

a proposed model that works as a tool for the sense making process. Security

risk management is a sense making process that should be carried out by

managers, this study is aiming to answer the question “How can organizations

manage knowledge risks in a business driven way?” The paper discuss that

knowledge security risks should be managed in sense making process and

systematic communication, instead of risks and business benefits being

traditionally evaluated in separate functions of organizations. Different

functions do not automatically communicate with each other in knowledge

security issues, and need a framework in order to successfully do this. From

this perspective, the author has introduced a model that takes the importance

of business needs in knowledge security management and discusses it in

different ways. The model share in the new literatures, because knowledge

perspective is hardly taken into consideration in information security reviews,

also the business perspective is not considered in existent knowledge security

risk management models that were analyzed in this paper.

2.5 Distinctive Features of the Current Study

This study might be considered as the first study to research the impact of

knowledge leakage management on innovative performance at commercial

banks in Amman, Jordan.

Knowledge leakage management concept: The current study expects that

it will raise consciousness about the role function of Knowledge leakage

management on achieving innovative performance at commercial banks in

Amman, Jordan.

35

Purpose: Most of the previous studies were undertaken to measure and

manage knowledge leakage from the security point of view, and to enhance

the company’s knowledge management key experiences. Few studies were

executed to study the effect of knowledge leakage management (knowledge

leakage, dynamic capabilities, and technological knowledge) on achieving

innovative performance (market and service).

Environment: Most previous studies have been implemented in various

countries outside the Arab region. The current study will be executed in

Jordan, as one of the Arab region countries.

Industry: Few studies concerning knowledge leakage management carried

out on service industry. The current study is dedicated to commercial bank

industry only.

Methodology: Most previous studies were found in annual reports of

various companies and industries. The current one is based on perception.

Variables: Most of previous studies and researches take one element of

knowledge leakage management, but in this research three elements were

taken; (knowledge leakage, dynamic capabilities, and technological

knowledge).

Population: Most previous studies took samples from population, but in

this study population of are all the commercial banks in Amman, Jordan, all

these banks are targeted, therefore there is no need for sampling.

Comparison: The current study will contrast the outcomes of this study

with the outcomes of previous studies mentioned earlier to shed the light on

similarities and differences that probably might be there

36

Chapter Three: Study Methodology (Method and

Procedures) 3.1 Introduction

In this chapter the study describes the methodology that have been followed

in the study, furthermore, the study population and sample has been presented,

then the data collection tools, reliability and validity were illustrated. At the

end of the chapter, the study variables and statistical tools have been

explained.

3.2 Study Methodology

The study used the descriptive and the cause-effect methods to test the

sample. In addition, it aims to study the impact of Knowledge Leakage

Management (Knowledge Leakage, Dynamic Capabilities, Technological

Knowledge) on achieving Innovative Performance (Market and Service) at

Commercial Banks in Amman, Jordan. This study begins with literature

review and expert’s interviews to develop model and measurement tool. The

data is collected by questionnaire, which is developed for this study. Then

after checking the collected questionnaires, they have been coded against

SPSS. Normality, validity and reliability were tested, then the correlation

between variables was checked and multiple regressions used to test the

hypothesis.

3.3Study Population

The population of this study consists of the total of (21) commercial banks

in Amman (National and Foreign Banks), which are registered in Association

of Banks in Jordan (ABJ) by December 2016.

37

3.4 Study Sample

The study will target all commercial banks, which negate the need for

sampling. Moreover, the units of analysis consist of all managers working at

commercial banks in Amman, Jordan.

3.5 Data Sources

For this study, data collected from two sources: secondary and primary

sources. Secondary data collected from Books, journals, theses, articles,

dissertation and worldwide web used to write theoretical framework of this

study Primary data collected via questionnaire, which based on literature

review and expert interviews, and developed based on referee committee.

The Questionnaire:

The questionnaire was divided into three sections, which include

demographic variables that intended to collect some demographic data about

research participants, the other sections concerning questions about

knowledge leakage management sub-variable, and innovative performance

dimensions.

In this study, both primary and secondary data were used. The data

collected for testing model through questionnaire that has been constructed by

three sections.

Section One:

Demographic information, it was collected with close-end questions,

through five characteristics, which include gender, age, education, job title and

years of experience in the bank.

38

Section Two:

This section measured the knowledge leakage management through (3) sub-

variables (Knowledge Leakage, Dynamic Capabilities, and Technological

Knowledge), knowledge leakage management measured on Likert-scale

ranging from 1 (Poor) to 5 (Excellent) by 24 items.

Section Three:

This section measured the innovative performance through (2) dimensions

(Market and Service), innovative performance measured by the five-point

ranging from 1 (Poor) to 5 (Excellent). Five-point Likert-type scale used to

measure all variables items as shown in table (3-1) by 12 items

Table (3-1): Likert-Scale Used with Variables

Poor Fair Good Very Good Excellent

1 2 3 4 5

3.6 Data Analysis Methods:

To actualize this study, all the commercial banks in Amman were targeted;

the questionnaires were sent appropriately to the concerned sections within

each bank. (420) questionnaires were distributed equally, a total of (385)

questionnaires were retrieved, and (6) were discarded due to large missing

data. Accordingly, no more than (379) responded questionnaires were valid

for the study data analysis, which means 90.2% of distributed questionnaires

were valid.

Study Validity

Two methods used to confirm validity of the study tool: content validity

and face validity. For content validity, multiple sources of literatures have

39

been used such as books, journals, articles, thesis, dissertations, and

worldwide websites. While for face validity the study has been presented the

questionnaire instrument to (10) academic reviewers from Middle East

University and other different Jordanian universities based on the appendix

(3), they have the experience in the field of this study, especially in business

management, E-Business, as well as the scientific research in order to provide

a coherent research instrument. Some items were updated and reformulated to

become more accurate to enhance the research instrument, while others were

dropped based on the valuable comments and recommendations received by

the domain experts.

Study Reliability

To measure the internal consistency and reliability of this study’s

constructs; the Cronbach’s alpha (α) measurement was used. Table (3-2)

demonstrated that Cronbach's alpha value range between (77.6 and 86.9).

Therefore, the reliability of the instrument is very good as (α) of the whole

variables is higher than (77.6).

Table (3-2): Internal Consistency Coefficients (Cronbach's Alpha)

No Variables Items Cronbach's Alpha

1 Knowledge Leakage 1 - 9 78.1

2 Dynamic Capabilities 10 - 18 79.7

3 Technological Knowledge 19 - 24 77.6

4 Market 25 - 30 86.9

5 Service 31 - 36 82.0

40

3.7Demographic Description of the Study Sample

This section aims to demonstrate the demographic information of the study

sample based on different respondents’ characteristics such as: gender, age,

educational qualification, job title and years of experience in current bank.

1) Gender: table (3-3) shows that the highest category is for (Male) by

frequency (253) - percentage of (66.8%), in the contrary, the lowest category

is (Female) by frequency (126) - percentage (33.2%).

Table (3-3): Gender Description

Variable Categories Frequency Percentage

Gender

Male 253 66.8

Female 126 33.2

Total 379 100%

2) Age: table (3-4) shows that the sample that ranged (Less than 28) was

the percentage of (10.8%) by frequency (41),then the age between (28 – 39) at

the percentage of (35.1%) by frequency (133), and the age between (39 – 48)

at the percentage of (41.4%) by frequency (151), and the age between (49 -

58) at the percentage of (11.6%) by frequency (44), finally, the sample range

Aged (More than 58 years old) was at the percentage of (1.1%) by frequency

(4). The above table leads the study to identify that the most of the study

sample were young people and still they were able to evaluate the knowledge

leakage consequences toward the performance.

Table (3-4): Age Distribution

Variable Categories Frequency Percentage

Age

Less than 28 41 10.8

28 – 39 133 35.1

39 – 48 157 41.4

49 – 58 44 11.6

More than 58 years 4 1.1

Total 379 100%

41

3) Education: table (3-5) shows that the highest sample was (Bachelor’s

Degree) at the percentage of (67.0%) by frequency (254), then (High

Diploma) at the percentage of (5.5%) by frequency (21), then (Master's

Degree) at the percentage of (5.8%) by frequency (70), and (PhD Degree) at

the percentage of (6.2%) by frequency (22). Finally, the (Other) was the

lowest educational category at the percentage of (2.5%) by frequency (9).

Obviously, results describes that the study sample has a good level of

education and they can fill in the questionnaire objectively, also they can

evaluate the impact of knowledge leakage on innovative performance

dimensions.

Table (3-5): Respondents Education

Variable Categories Frequency Percentage

Education

Bachelor's Degree 254 67.0

High Diploma 21 5.5

Master's Degree 70 18.5

PHD Degree 22 5.8

Other 12 3.2

Total 379 100%

4) Job Title, table (3-6) shows the descriptive analysis for the position

within commercial banks. However, the category of (Executive Manager) was

at the percentage of (3.7%) by frequency (14), then the lowest category

(General Director) at the percentage of (2.9%) by frequency (11), and the

category of (Administrator Manager) at the percentage of (14.2%) by

frequency (54), and the highest category (Head of Section) at the percentage

of (46.7%) by frequency (177). Finally, the percentage of (32.5%) is holding

other positions in commercial banks by frequency (123). This proves that

those who have the authority are best evaluating the impact of knowledge

leakage on innovative performance.

42

Table (3-6): Respondents Job Title

Variable Categories Frequency Percentage

Job Title

Executive Manager 14 3.7

General Director 11 2.9

Administrative Manager 54 14.2

Head of Section 177 46.7

Other 123 32.5

Total 379 100%

5) Years of Experience in Banks, table (3-7) shows the first category

(Less than 5 years) at the percentage of (11.1%) by frequency (42), then (5 –

14 years) at the percentage of (36.1%) by frequency (137), then (15 – 20

years) at the percentage of (42.7%) by frequency (162). Finally, the last

category (More than 20 years) at the percentage of (10.0%) by frequency (38).

Table (3-7): Respondents Experience

Variable Categories Frequency Percentage

Experience

Less than 5 years 42 11.1

5 – 14 years 137 36.1

15 – 20 years 162 42.7

More than 20 years 38 10.0

Total 379 100%

43

Chapter Four: Data Analysis and Hypothesis Testing 4.1 Introduction

This chapter includes descriptive statistical analysis; correlation between

variables; and multiple regressions to test the impact of Knowledge Leakage

Management on Innovative Performance at Commercial Banks in Amman.

4.2Description of Statistics of the Study Variables

This section includes Description of Statistics, which contain the arithmetic

mean, and standard deviations as well as the level of importance. The level of

responses of study sample and the importance of items will be measured at

three levels due to the following Interval Length according to (Sekaran &

Bougie, 2013):

(Highest Value – Lowest Value) / Number of Levels of the Interval Length =

(5-1) / 3 = 4/3 = 1.33

- The low degree (From 1 to 2.33)

- The medium degree (From 2.34 to 3.66).

- The high degree (From 3.67 to 5).

a) Descriptive Analysis of the Independent Variable

Table (4-8) shows that the means of knowledge leakage management sub-

variables range between 3.86 and3.94, with standard deviations range between

0.44and 0.48. The average mean for all knowledge leakage management sub-

variables is (3.94) with standard deviation of (0.25). The knowledge leakage

rated highest mean, followed by technological knowledge and finally,

44

dynamic capabilities. This means that knowledge leakage management is very

important issue at commercial banks in Amman, where t=299.59>1.96.

Table (4-8): Mean, Standard Deviation, Ranking and Importance for “Knowledge

Leakage Management”

No Dimension Mean St.D. t-Value Sig Rank Importance

1 Knowledge Leakage 3.94 0.44 41.21 0.00 1 High

2 Dynamic Capabilities 3.86 0.46 36.09 0.00 3 High

3 Technological Knowledge 3.93 0.48 37.59 0.00 2 High

Knowledge Leakage

Management 3.94 0.25 299.59 0.00 - High

T-tabulated=1.96

Knowledge Leakage:

Table (4-9) shows the statists of "Knowledge Leakage", the means range

from 3.64to4.20, with standard deviations range from 0.61 to 0.82.

Table (4-9): Mean, Standard Deviation, Ranking and Importance for “Knowledge

Leakage”

No Statement Mean St.D. t-Value Sig Rank Importance

1 Bank faces information leakage

through identifying new knowledge. 3.93 0.81 22.18 0.00 5 High

2 Bank experiences information leakage

through implementing knowledge. 3.93 0.74 24.30 0.00 5 High

3 Bank faces leakage during codifying

knowledge. 4.20 0.73 31.70 0.00 1 High

4 Knowledge leakage occurred through

staff layoff. 4.05 0.61 33.35 0.00 2 High

5

Employees could share confidential

information related to business with

external parties.

3.88 0.75 22.82 0.00 7 High

6

Employees share knowledge related to

business innovation with external

parties.

3.89 0.75 23.15 0.00 6 High

7 Employees have easy access to their

colleagues' knowledge bases. 3.64 0.81 15.32 0.00 8 Medium

8 Bank invites outside members to

participate in training programs. 4.03 0.70 28.66 0.00 3 High

9 Employees share their experiences

with external partners. 3.97 0.82 22.82 0.00 4 High

Knowledge Leakage 3.94 0.44 41.21 0.00 - High

T-tabulated=1.96

45

The domain standard deviation is 0.21, which considered good, and

indicates that variance is low and the responses are closed to each other. The

average mean for "Knowledge Leakage" reached 3.94 with standard deviation

of 0.44, this means that commercial banks in Amman consider knowledge

leakage of high importance, where t-value=41.21>1.96.

Dynamic Capabilities:

Table (4-10) shows the statists of "Dynamic Capabilities" where the study

observes that the means range from 3.73 to 4.04, with standard deviations

range from 0.52 to 0.67.

Table (4-10): Mean, Standard Deviation, Ranking and Importance for “Dynamic

Capabilities”

No Statement Mean St. D. t-Value Sig Rank Importance

10 Competencies are improved through

transferring employees across internal

divisions.

3.96 0.62 29.89 0.00 4 High

11 Management discusses strength and

weakness points with competitors. 3.82 0.62 25.27 0.00 7 High

12 Pricing is regularly monitored by

rivals. 4.01 0.60 32.39 0.00 2 High

13 Bank controls sharing knowledge of

reconfiguring firm's assets structure. 4.04 0.58 34.42 0.00 1 High

14 Sharing R&D department ideas with

external parties is managed. 3.97 0.63 29.91 0.00 3 High

15 Bank manages sharing ideas with

employees through decision-making

process.

3.89 0.52 32.79 0.00 5 High

16 Exchanging knowledge amongst

Supply-Chain participants is

managed.

3.86 0.63 26.30 0.00 6 High

17 Bank manages sharing knowledge of

intellectual property repositories. 3.73 0.63 22.25 0.00 8 High

18 Bank has an external collaborative to

handle the capacity expansion. 3.74 0.67 21.25 0.00 9 High

Dynamic Capabilities 3.86 0.46 36.09 0.00 - High

T-tabulated=1.96

46

The domain standard deviation is 0.15, which considered good, and

indicates that variance is low and the responses are closed to each other. The

average mean for "Dynamic Capabilities" reached 3.86 with standard

deviation of 0.46, this means that commercial banks in Amman consider

dynamic capabilities of high importance, where t-value=36.09>1.96.

Technological Knowledge:

Table (4-11) below shows the statists of "Technological Knowledge" item

of responses, the study observes that the means range from 3.73 to 4.03, with

standard deviations range from 0.71 to 0.83.The domain standard deviation is

0.12, which considered good, and indicates that variance is low and the

responses are closed to each other.

Table (4-11): Mean, Standard Deviation, Ranking and Importance for “Technological

Knowledge”

No Statement Mean St. D. t-Value Sig Rank Importance

19 Bank management has clear policies

to control exchanging e-mails. 4.01 0.82 23.90 0.00 3 High

20 Bank experiences leakage through

using technologies to submit Reports. 3.91 0.80 22.10 0.00 4 High

21 Bank controls the incident of leakage

through using technologies to submit

confidential documents.

4.03 0.83 24.06 0.00 1 High

22 Employees are prohibited to build

blogs through intranet. 3.90 0.71 24.56 0.00 5 High

23 Employees are prohibited to access

systems from outside offices. 4.02 0.81 24.45 0.00 2 High

24 Bank involves technologies in

developing problem-solving

strategies.

3.73 0.83 16.92 0.00 6 High

Technological Knowledge 3.93 0.48 37.59 0.00 - High

T-tabulated=1.96

The average mean for "Technological Knowledge" reached 3.93 with

standard deviation of 0.482this means that commercial banks in Amman

47

consider Technological Knowledge of high importance, where t-

value=37.59>1.96.

b) Description of the Independent Variable

Table (4-12) shows that the mean of innovative performance dimensions

range between 3.81 and3.90, with standard deviations range between 0.47and

0.47. Initially, the average mean for all innovative performance dimensions is

3.85with standard deviation of 0.43.

Table (4-12): Mean, Standard Deviation, Ranking and Importance for “Innovative

Performance”

No Dimension Mean St. D. t-Value Sig Rank Importance

1 Market 3.90 0.47 37.54 0.00 1 High

2 Service 3.81 0.47 33.34 0.00 2 High

Innovative

Performance 3.85 0.43 172.45 0.00 - High

T-tabulated=1.960

This means that innovative performance is very important at commercial

banks in Amman, where t=172.45>1.96. The service has rated the highest

mean, and then followed by market.

Market:

Table (4-13) shows statistics of "Market" item of responses, the study

observes that means range from 3.76 to 4.08, with standard deviations, range

from 0.67to 0.94.The domain standard deviation is 0.27, which considered

good, and indicates that variance is low and the responses are closed to each

other. The average mean for "Market" reached 3.90 with standard deviation of

0.470, which mean that there is an agreement among respondents on high

importance of these items. This means that commercial banks in Amman

consider market of high importance, the T-tabulated shows a high value where

t-value= 37.54>1.96.

48

Table (4-13): Mean, Standard Deviation, Ranking and Importance for “Market”

No Statement Mean St. D. t-Value Sig Rank Importance

25

Adoption of technological

innovations in bank business

solutions amongst competitors.

3.81 0.80 19.61 0.00 4 High

26 Using innovative advertising ideas for

new services. 4.08 0.67 30.99 0.00 1 High

27

Adoption of an innovative marketing

program to promote the competitive

position in the marketplace.

3.76 0.74 19.98 0.00 5 High

28 Responding to changes of client's

need. 3.91 0.81 21.76 0.00 3 High

29 Ensuring clients satisfaction. 3.98 0.76 25.11 0.00 2 High

30 Solving client problem in an

innovative ways. 3.91 0.94 18.72 0.00 3 High

Market 3.90 0.47 37.54 0.00 - High

T-tabulated=1.96

Service:

Table (4-14) shows the statistics of "Service" item of responses. The study

observes that the Mean ranges from 3.54 to 3.70 with standard deviation

ranges from 0.59 to 0.99.

Table (4-14): Mean, Standard Deviation, Ranking and Importance for “Service”

No Statement Mean St. D. t-Value Sig Rank Importance

31 Improvement of services in

comparison with the previous. 3.57 0.99 11.11 0.00 5 Medium

32 Using latest technologies to introduce

services. 3.54 0.98 10.67 0.00 6 Medium

33 The novelty of services in

marketplace. 3.64 0.81 15.44 0.00 4 Medium

34 Delivering cutting-edge services in

comparison with rivals. 3.70 0.83 16.34 0.00 3 High

35 Diversification of services. 4.21 0.59 40.03 0.00 2 High

36 Quality of bank's services 4.26 0.61 39.91 0.00 1 High

Service 3.81 0.47 33.34 0.00 - High

T-tabulated=1.96

The domain standard deviation is (0.40), which considered good, and

indicates that variance is low and the responses are closed to each other. The

average mean for "Service" reached (3.81) with standard deviation of (0.47)

49

this means that the commercial bank in Amman consider market of high

importance, where t-value= 33.34>1.96.

4.3 Relationships between Variables

Table (4-15) shows that there are relationships among knowledge leakage

management sub-variables, where (r) ranging between -0.01 and 0.13.The

technological knowledge shows a negative correlation with knowledge

leakage. Moreover, there are relationships between innovative performance

dimensions are also, where (r) ranges between 0.08 and 0.62. Furthermore, the

dimensions of the independent variable (Innovative Performance) in market

and service show that there is a negative correlation with knowledge leakage.

Table (4-15): Bivariate Pearson Correlation (r) Matrix between Independent and

Dependent Variables.

No 1 2 3 4 5 6 7

1 Knowledge Leakage

2 Dynamic Capabilities 0.13**

0.00

3 Technological

Knowledge

-0.01 0.10*

0.84 0.03

4 Knowledge Leakage

Management

0.54** 0.40** 0.68**

0.00 0.00 0.00

5 Market -0.16** 0.09 0.27** 0.10*

0.00 0.07 0.00 0.04

6 Service -0.17** 0.12* 0.21** 0.08 0.62**

0.00 0.01 0.00 0.12 0.00

7 Innovative

Performance

-0.18** 0.12* 0.27** 0.11* 0.88** 0.88**

0.00 0.01 0.00 0.03 0.00 0.00

**. Correlation is significant at the 0.01 level (2-tailed).

The table also shows that there are relationships among knowledge leakage

management sub-variables and innovative performance dimensions, since (r)

ranging from -0.01 to 0.88. Finally, there are relationships between knowledge

50

leakage management and innovative performance dimensions, where (r) equal

0.11.

4.4 Hypothesis Testing

Multiple regressions are used to test the effect of knowledge leakage

management on achieving innovative performance at commercial banks in

Amman. After confirming validity, reliability and relationships between

variables, the following tests were carried out to be able to use multiple

regressions; normality and multicollinearity (Sekaran & Bougie, 2013).

Normal Distribution of Study Variables (Histogram):

The histogram in the figure (4-2) shows that the data are normality

distributed, so the residuals does not affect the normal distribution.

Figure (4-2): Normality Test

51

Multi-Collinearity Test:

Multicollinearity was detected by using the Tolerance and Variance

Inflation Factory (VIF) test for each of the study independent variables, taking

into account that Tolerance value should be more than 0.2 and the VIF value

should be less than 10. Table (4-16) is illustrating the results of tests

mentioned above.

Table (4-16): Multicollinearity: VIF, Tolerance test

Independent Variables Tolerance VIF

Knowledge Leakage 0.980 1.020

Dynamic Capabilities 0.969 1.032

Technological Knowledge 0.988 1.013

It is evident from the above table that the Variance of Inflation (VIF) values

for all variables are less than (10) and range from (1.013 to 1.032), and

tolerance values ranged from (0.969 to 0.988), which is higher than 0.2. The

data were confirmed by normal distribution where all significant values were

greater than (0.05).

The Main Hypothesis:

(H₀1): There are no impacts of Knowledge Leakage Management sub-

variables (Knowledge Leakage, Dynamic Capabilities, and Technological

Knowledge) on the innovative performance, at ( ≤ 0.05).

To test this hypothesis, and to detect the impact of knowledge leakage

management sub-variables on innovative performance atcommercial banks in

Amman, Jordan, the study used the multiple regression analysis as shows in

table (4-17) below:

52

Table (4-17): Multiple Regression Analysis of the impact of Knowledge Leakage

Management (Knowledge Leakage, Dynamic Capabilities, and Technological

Knowledge) on Innovative Performance.

Independent

Variable

Model Summary ANOVA Standardized

Coefficients Coefficients

r R2 Adjusted

R2

"F"

Value

"F"

Sig Beta "T" "T"

Sig 0.35 0.12 0.11 17.58 0.00

Knowledge

Leakage

-0.20 -4.13 0.00

Dynamic

Capabilities 0.12 2.51 0.01

Technological

Knowledge 0.25 5.28 0.00

*Dependent variable: Innovative Performance

Table (4-17) shows that when regression the three independent variables of

knowledge leakage management together against dependent variable

innovative performance. The model is fit for further analysis, where R2 is 12%

shows the fitness of the model for multiple regressions, and explains the

variance of independent variable on dependent variable, since R2 is 12%. Then

the independent variable can explain 0.12% of variance on dependent variable,

where (R2=0.12, F=17.58, Sig.=0.00).Therefore, the null hypothesis is rejected

and the alternative hypothesis is accepted, which states that knowledge

leakage management sub-variables (Knowledge Leakage, Dynamic

Capabilities and Technological Knowledge) impact innovative performance at

commercial banks, at α≤0.05.

Sub-hypotheses:

Table (4-17) also shows the effect of each Knowledge Leakage

Management sub-variables on Innovative Performance.

53

H₀1.1: There is no impact of Knowledge Leakage on the innovative

performance, at ( ≤ 0.05).

Table (4-17) shows that there is a negative impact of knowledge leakage on

Innovative Performance (Beta= -0.20, t= -4.13, sig. = 0.00, p>0.05.). The

statistical numbers stated a negative impact from the leakage on innovative

performance, which could be logically approved since the leakage has an

obvious negative effect on innovation in markets and services.

Therefore, the null hypothesis is rejected and the alternative hypothesis is

accepted, which states that knowledge leakage is negatively affects innovative

performance at commercial banks, at α≤0.05.

H₀1.2: There is no impact of Dynamic Capabilities on the innovative

performance, at ( ≤ 0.05).

Table (4-17) shows that there is a positive impact of Dynamic Capabilities

on Innovative Performance, since (Beta= 0.12, t= 2.51, sig. =0.00, p>0.05.)

Therefore, the null hypothesis is rejected and the alternative hypothesis is

accepted, which states that Dynamic Capabilities are positively affects

Innovative Performance of commercial banks, at α≤0.05.

H₀1.3: There is no impact of Technological Knowledge on the

innovative performance, at ( ≤ 0.05).

Table (4-17) shows that there is a positive impact of Technological

Knowledge on Innovative Performance, since (Beta= 0.25, t= 5.28, sig. =

0.01, p>0.05.)

54

Therefore, the null hypothesis is rejected and the alternative hypothesis is

accepted, which states that Technological Knowledge is positively affect

Innovative Performance of commercial banks, at α≤0.05.

In brief, the multiple regressions analysis shows that the knowledge leakage

management sub-variables together affect the innovative performance, where

(R2=0.12, F=17.58, Sig. =0.00). In addition, it shows that all the three sub-

variables affect innovative performance, where Technological Knowledge is

having the highest effect, followed by dynamic capabilities, then knowledge

leakage with a negative effect.

55

Chapter Five: Results Discussion and Recommendation

5.1 Introduction

The study in this thesis studied several issues related to knowledge leakage

management caused through many areas with quantitative methods.

Furthermore, a conceptual model has been proposed of knowledge leakage

management and its impact on innovative performance in market and services.

With this conceptual model, banks, which hold highly confidential knowledge

can represent and understand the possibility of knowledge leakage issues more

clearly. The quantitative approach gives the ability to help banks to classify

confidential knowledge, evaluate and mitigate the risk of potential knowledge

leakage. It is an interesting and challenging research topic to control

knowledge leakage through the areas of (Knowledge Leakage, Dynamic

Capabilities and Technological Knowledge).

5.2 Results Discussion

In the light of the data analysis and responses that described in previous

chapter, results are discussed and compared with other studies as following:

Based on the results of investigating the impact of knowledge leakage

management in (Knowledge Leakage) on innovative performance, there is

high level of agreement on “Knowledge Leakage”, from the study sample

perspective. The result is compatible with Ilvonen et al.(2018) pointed to the

creation, codifying, and applying of knowledge as an essential source of the

competitive advantage and business opportunities for nearly every

organization. There is a little literature on protecting knowledge issues

through knowledge Leakage, but in this study, there has been an argument that

56

knowledge security risks should be managed in a systematic process to avoid

leakage. Moreover, the study has a high degree of developing knowledge

leakage for knowledge protection.

There is a high level of agreement on “Dynamic Capabilities”, from

perspective among model of this thesis. The results were compatible with

Teece (2017) study, which presented the dynamic capabilities systems and

several methods to analyze the distinctiveness of organizations and the sources

of competitive advantage. The study revealed that the ease of coordination

inside firms as well as through the market, lead to increase worries about the

leakage of valuable knowledge.

In addition there is a high level of agreement on “Technological

Knowledge”, from perspective among samples of this thesis. Results were

consistent with Serna et al. (2017), which found that many of the strategies are

related to the human as well as technical factors. However, in organizations,

the managers of security and knowledge realized the differences and they

focus now on shifting from the technical issues to the humanity factors.

Furthermore, it proposed to increase employees’ awareness and understanding

of the way they interact with other people, their computing systems and

mobile devices could either improve or reduce the effectiveness of a security

programs.

Moreover, the study shows a high degree of agreement on “Market” from

perspective among samples of this thesis. Results were consistent with

Adaileh & Abualzeat (2017) study finding, which stated that knowledge

leakage negatively mediate the positive impact of knowledge sharing on

market innovative performance. There is a high degree of agreement on

57

“Service”, from perspective among sample of study. This result consistent

with Adaileh & Abualzeat (2017), study finding, which stated that knowledge

leakage negatively mediate the positive impact of knowledge sharing on

products and services innovative performance.

5.3 Study Conclusion

Based on the statistical results, the following points may consider as

conclusion:

There are an increasingly consensus among the commercial banks regarding

the impact of knowledge leakage management on innovative performance.

Results shows that managers and head of departments at commercial banks

in Jordan believe on the importance of being aware of knowledge leakage

management (knowledge Leakage, dynamic capabilities, technological

knowledge) in order to sustaining innovative performance dimensions (market

and service).

Results show that there is a high agreement with Knowledge Leakage and

Innovative Performance in commercial banks in Jordan.

Results show that there is obviously a positive impact of knowledge leakage

management on the innovative performance, which might control an integral

part of business.

5.4 Study Recommendation and Future work

Based on the current results and the study suggest the following

recommendations:

58

Recommendations for management at Commercial Banks in Amman,

Jordan:

The current study recommends that Knowledge Leakage Management

elements may affect the bank’s Innovative Performance at Commercial Banks

in Amman, Jordan.

The current study recommends that it is essential in knowledge leakage

studies to assure the respondents with a full of confidentiality and anonymity

in order to smooth the progress of receiving nonbiased responses and to

increase the level of privacy.

The current study recommends a better understanding of business strategies

and operations would help to develop solutions for banks to avoid the danger

of performance troubles caused by knowledge leakage. Besides, knowledge

leakage and the ways proposed to reduce the experienced risk should be

sensitive to the real world issues.

The current study recommends exploring how partners that are not directly

connected to the bank may exploit leaked knowledge. In case a bank acquired

knowledge from partners, what incentives might it have to share the

knowledge with another bank?

The current study recommends that areas of knowledge leakage should be

tested for relevance and suitability in different sectors and positions in

commercial banks, for example, the items could be tested in more different

dimensions.

The current study recommends continuous training for employees including

the management to raise the awareness of security issues even in the

appearance of advanced technical measurement, because weakness links

might happened through inevitably employees who either maliciously or

59

through ignorance are not implementing the security procedures. Having

sufficient training is essential for achieving the value from all that protected

hardware and software.

Recommendations for Academician and Future Research:-

The implementation of knowledge leakage management at commercial

banks in Amman will undoubtedly contribute to enriching and rising

awareness and the importance of this study to other studies.

This study will open new perspectives for studies who are interested in

knowledge leakage management, which may contribute in further

development in this new aspect.

It is strongly recommended for future studies on how banks can evaluate

the expected positives of knowledge exchange against the expected negatives

of knowledge leakage.

This study is recommending new studies to focus on knowledge leakage

subjects in lighting of the proposed areas of knowledge leakage in this study.

Additionally, the study recommends others to conduct more studies and

researches in the field of innovative performance in the future.

The current study strongly recommends future researches upon this filed to

use the same modeling except with larger sample.

Finally, recommend to apply this model on another population in different

industries such as telecommunications companies.

60

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Appendix (1)

The Questionnaire in English

Dear Sir, Madam,

This questionnaire is part of a study being conducted by Middle East University in

Amman, Jordan. The goal of the study is to investigate "The Impact of Knowledge

Leakage Management on Innovative Performance in Market and Service".

In this regard, the study has developed a questionnaire to learn more about the impact of

knowledge leakage on innovative performance in Jordanian Commercial Banks. To gain an

accurate understanding of areas of leakage, which might impact the innovation performance

in Market and service; it is critical to hear from both managers and employees who are

using banking systems. Knowledge we gain from your responses will help the study to

complete her thesis where needed and requested.

All information you provide will be kept strictly confidential for the university purposes.

Your responses would be highly appreciated.

Researcher Name Supervised by

Ahlam Yousef Hassan Prof. Hebah H. O. Nassirddin

70

First Section: Demographic Variables

Gender

Male Female

Age

Less than 28 28-38 39-48 49-58 More than 58 years old.

Educational Qualification

Bachelor’s Degree High Diploma

Master’s Degree PHD Degree

Other (kindly mention)……………..

Job Title

Executive Manager General Director

Administrative Manager Head of Section

Other (kindly mention)……………..

Years of Experience in Banks

Less than 5 years. 5-14 years

15-20 years. More than 20 years.

Second Section: Knowledge Leakage Management:

1- Knowledge Leakage 2- Dynamic Capabilities 3-Technological Knowledge

1- Knowledge Leakage

# Statements Poor Very Good Good Fair Excellent

1. Bank faces information leakage through identifying new

knowledge.

2. Bank experiences information leakage through

implementing knowledge.

3. Bank faces leakage during codifying knowledge.

4. Knowledge leakage occurred through staff layoff.

5. Employees could share confidential information related to

business with external parties.

6. Employees share knowledge related to business

innovation with external parties.

7. Employees have easy access to their colleagues'

knowledge bases.

8. Bank invites outside members to participate in training

programs.

9. Employees share their experiences with external partners.

2- Dynamic Capabilities

# Statements Poor Very good Good Fair Excellent

10. Competencies are improved through transferring

employees across internal divisions.

11. Management discusses strength and weakness points with

competitors.

12. Pricing is regularly monitored by rivals.

13. Bank controls sharing knowledge of reconfiguring firm's

assets structure.

71

14. Sharing R&D department ideas with external parties is

managed.

15. Bank manages sharing ideas with employees through

decision-making process.

16. Exchanging knowledge amongst Supply-Chain

participants is managed.

17. Bank manages sharing knowledge of intellectual property

repositories.

18. Bank has an external collaborative to handle the capacity

expansion.

3- Technological Knowledge

19. Bank management has clear policies to control

exchanging e-mails.

20. Bank experiences leakage through using technologies to

submit Reports.

21. Bank controls the incident of leakage through using

technologies to submit confidential documents.

22. Employees are prohibited to build blogs through intranet.

23. Employees are prohibited to access systems from outside

offices.

24. Bank involves technologies in developing problem-

solving strategies.

Third Section: Innovative Performance:1- Market 2- Service

1- Market

Excellent Fair Good Very good Poor To what extent do you evaluate your bank's innovative

performance regarding: Adoption of technological innovations in bank business

solutions amongst competitors. 25.

Using innovative advertising ideas for new services. 26. Adoption of an innovative marketing program to

promote the competitive position in the marketplace. 27.

Responding to changes of client's need. 28. Ensuring clients satisfaction. 29. Solving client problem in an innovative ways. 30.

2- Service

Excellent Fair Good Very good Poor To what extent do you evaluate your bank's innovative

performance regarding: Improvement of services in comparison with the

previous. 31.

Using latest technologies to introduce services. 32.

The novelty of services in marketplace. 33.

Delivering cutting-edge services in comparison with

rivals. 34.

Diversification of services. 35.

Quality of bank's services 36.

72

Appendix (2)

The Questionnaire in Arabic

السيد الفاضل / السيدة الفاضلة

:تحية طيبة وبعد

تسرب المعرفة على الأداء الإبداعي" دراسة ميدانية في البنوك التجارية إدارة أثر تجري الباحثة دراسة حول "

العاملة في الأردن ضمن مدينة عمان. وتعد جزء من متطلبات الحصول على شهادة الماجستير في الأعمال الالكترونية

ايشين مع طبيعة من جامعة الشرق الأوسط. وبوصفكم صناع القرار ومتخذيه في البنوك من موقعكم الإداري والمتع

ليكم إالأصلح على تزويد الباحثة بالمعلومات الواقعية والصحيحة، ومن هذا المنطلق تتوجه فأنتمالعمل وإجراءاته

في المربع الذي يعكس رأيك والمقابل ( √) والإجابة عن فقراتها بوضع إشارة راجيا قراءتها بتمعن ،المرفقة بالاستبانة

.لكل فقرة

وتطوير أداء بنوككم من جهة أخرى، ،تقديم العون لها لإعداد دراسة تتسم بالموضوعية من جهةإن الباحثة تأمل ب

.هي فقط لأغراض البحث العلمي وسيتم التعامل معها بسرية تامة ستبانةالاعلما بأن المعلومات الواردة في

.والتقديرمع جزيل الشكر

اسم المشرفة: الباحثة: اسم

ناصرالدينحسن د. هبة أ. حسن أحلام يوسف

73

المتغيرات الديمغرافية: أولا:

:( في المكان المناسب√المناسبة عن طريق وضع إشارة ) اختيار الإجابةيرجى

:الجنس -1

ذكر أنثى

:العمر -2

82 – 88 82أقل من

83 - 82 83 – 82

فما فوق. 82

:المؤهل العلمي -3

دبلوم عال بكالوريوس

دكتوراهماجستير

................................غير ذلك يرجى التحديد

:المسمى الوظيفي -4

مدير عام مدير تنفيذي

رئيس قسم إشرافيهمدير إدارة

................................غير ذلك يرجى التحديد

:البنكسنوات الخبرة العملية في -5

سنوات 48إلى 8من سنوات 8أقل من

سنة. 82أكثر من 82إلى 15من

74

، القدرات الديناميكية، المعرفة التكنولوجية(تسرب المعرفةتسريب المعرفة )إدارة

تسرب المعرفة الرقم الفقرة ضعيف مقبول جيد جيد جدا ممتاز

يواجه البنك تسريباٌ للمعلومات عند تحديد احتياجاته من المعارف الجديدة.

1.

.2 يواجه البنك تسريباٌ للمعلومات في أثناء تطبيق المعارف.

.3 يواجه البنك تسريب للمعلومات في أثناء تدوين المعارف. .4 للمعارف عند فصل الموظفين.يحدث تسريباٌ

من الممكن أن يشارك موظفو البنك معلومات سرية تتعلق بالعمل مع أطراف خارجية.

5.

يشارك موظفو البنك المعرفة التي تتعلق بالإبداع في مجال الأعمال مع أطراف خارجية.

6.

.7 هنالك سهولة للوصول إلى قواعد المعرفة الخاصة بالزملاء. يستدعي البنك أعضاء خارجيين للمشاركة في البرامج التدريبية الخاصة

بالمعرفة.8.

.9 يشارك موظفو البنك خبراتهم مع أطراف خارجية.

القدرات الديناميكيةالموظفين بين الأقسام من خلال تنقل لإدارة الكفاياتيحدث تطوير

.الداخلية11.

.11 المنافسين. والضعف معنقاط القوة تناقش الإدارة

.12 مراقبة الأسعار بشكل دوري من قبل المنافسين. تتم أصول هيكلة تشكيل إعادةلمعارف التي تتعلق بيتحكم البنك بمشاركة ا

.الشركة13.

مشاركة أفكار قسم البحث والتطوير مع الأطراف بإدارة يقوم البنك الخارجيين.

14.

.15 الأفكار مع الموظفين أثناء عملية صنع القرار. ةمشارك إدارة تتم .16 لمعارف بين أعضاء سلسلة التوريد.يقوم البنك بإدارة تبادل ا

.17 مشاركة المعارف الخاصة بمخازن الملكية الفكرية.يقوم البنك بإدارة .18 .القدرات تطوير خارجيين لإدارة أطراف مع يوجد تعاون

المعرفة التكنولوجية .19 البنك سياسات واضحة للتحكم بتبادل البريد الإلكتروني. إدارة لدى يحدث تسريب للوثائق السرية في البنك أثناء عملية التواصل عبر

استخدام وسائل التكنولوجيا.21.

الاتصالعملية ءالسرية أثنا تقاريرالب يقوم البنك بضبط أي حادثة لتسر عبر استخدام وسائل التكنولوجيا.

21.

عمل مدونات الكترونية عبر الانترانت )الشبكة من لموظفين يمنع ا الداخلية(.

22.

.23 الوصول إلى النظام من خارج المكاتب.من لموظفين يمنع ا

لال تطوير استراتيجيات حل يسعى البنك لتضمين التكنولوجيا خ .المشكلات

24.

الإبداعي )السوق، الخدمة(الأداء

السوق إلى أي مدى تقيم الأداء الإبداعي للبنك من حيث: ضعيف مقبول جيد جيد جدا ممتاز

.25 .المنافسين بين البنكية الأعمال حلول في التكنولوجية الابتكارات اعتماد .26 استخدام الأفكار الإبداعية للإعلان عن المنتجات والخدمات الجديدة. .27 اعتماد البرامج التسويقية الإبداعية لرفع المركز التنافسي في السوق. .28 الاستجابة للتغيرات التي تطرأ على احتياجات العملاء.

75

.29 التأكد من رضا العملاء. .31 العملاء بطرق إبداعية. شكلاتحل م

الخدمة .31 .بما سبق مقارنةالخدمات تطوير .32 استخدام أحدث التكنولوجيا لتقديم والخدمات. .33 حداثة الخدمات في السوق. .34 .مع المنافسين المتطورة بالمقارنة الخدمات تقديم .35 .تنوع الخدمات

.36 .جودة الخدمات

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Appendix (3)

Professors’ Questioner Jury NO. Professor Name University

1 Prof. Osama Rababa'a Middle East University

2 Prof.Ahmad Ali Saleh Middle East University

3 Prof.Sameer Aljabali Middle East University

4 Prof. Taleb Warad Middle East University

5 Prof. Abbass Al Shariefi Middle East University

6 Prof. AbdulhafizSalamah Middle East University

7 Prof. Hana'a Al Hunaiti The World Islamic Science &Education University

8 Dr. Mohhamed AL-Adaileh Middle East University

9 Dr. Mohammad Ma'aytah Al Balqa Applied University

10 Dr. Dojanah Al Nabulsi Al Balqa Applied University

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Appendix (4)

List of Members of Association of Banks in Jordan

No. of

Staff

No. of

Branch

Arabic Name Bank's Name #

Bank of Jordan 1 بنك الأردن 64 1385

ABC ABC Bank 2بنك 91 440

City Bank 3 سيتي بنك 2 62

Jordan Kuwait Bank 4 البنك الأردني الكويتي 64 1001

Invest Bank 5 البنك الاستثماري 1 488

Ahli Bank 6 البنك الأهلي 34 1186

نيالبنك التجاري الأرد 94 613 Jordan Commercial Bank 7

Arab Bank 8 البنك العربي 50 2800

المصري العربيالبنك العقاري 7 290 Egyptian Arab Land Bank 9

National Bank of Kuwait 10 بنك الكويت الوطني 4 108

National Bank of Abu Dhabi 11 بنك أبو ظبي الوطني 2 53

Bank al Etihad 12 بنك الإتحاد 49 944

ة والتمويلسكان للتجارالإبنك 46 1814 Housing Bank 13

Arab Jordan Investment Bank 14 بنك الاستثمار العربي الأردني 96 660

نالرافدي مصرف 2 24 Rafidain Bank 15

Cairo Amman Bank 16 بنك القاهرة عمان 47 1121

دستاندرد تشارتربنك 6 178 Standard Chartered Bank 17

Societe General Bank Jordan 18 بنك سوسيته جنرال 92 239

Bank Audi 19 بنك عودة 92 274

Capital Bank 20 بنك المال الأردني 8 551

المهجربنك لبنان و 99 327 BLOM Bank 21

14,558 422 Total

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Appendix (5)

MEU's Letter